Facebook shares are rising after the company reported an across the board beat on earnings.

Shares are trading up 1.65% at $US189.69 after the company reported adjusted earnings of $US2.39 per shares versus the Wall Street consensus of $US2.25. Revenue came in at $US12.78 billion, easily topping the $US12.55 billion that was expected.

Investors initially sent shares of the company down more than 5% after GAAP earnings came in short, but slowly rebounded as investors realised the miss was due to a one-time tax hit of $US0.77 per share.

Facebook saw a 50 million-hour-a-day reduction in the time spent in its newsfeed, which initially seemed worrisome for the company. But CEO Mark Zuckerberg said users had started to post using its “Stories” feature, which many claim the company stole from Snapchat, more than to their timelines.

“We expect Stories are on track to overtake posts in Feed as the most common way that people share across all social apps,” Zuckerberg said on the call.

Zuckerberg also talked about wanting to reduce abuse on the platform and hinted that its “Stories” feature could be a part of doing that. The emphasis on “Stories” is not expected to impact revenue growth, and could even provide a new advertising format when space on the platform is starting to run thin, according to some analysts.

“All in, Q4 fundamentals were very impressive – very consistent and premium growth with record-high Operating Margins,” Mark Mahaney, an analyst at RBC Capital Markets, said in a note to clients. Mahaney raised his price target to $US250 after the report.

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